Owing to the growing population and increasing purchasing power among people, India’s real estate market has always been a lucrative option for investors. After the COVID-19 pandemic, real estate investment in India has grown significantly, with both domestic and NRI investors actively investing in housing and commercial properties.
As per the Indian Brand Equity Foundation (IBEF) data, investments in the real estate sector in seven cities of India increased by 29% in the last quarter of 2021 as against the same quarter in 2020. To make the most of this boom in the Indian real estate market, several reputed builders and promoters are coming up with new launches across the country.
During this period Piramal Realty has launched several luxury housing projects in Mumbai and Thane, such as Piramal Revanta, Piramal Mahalaxmi, Piramal Aranya, and Piramal Vaikunth. These projects offer a luxurious lifestyle with a plethora of modern amenities.
As per the experts, this trend will continue in 2023, and a strong and positive momentum is expected in India’s real estate sector. Now, let us dig deeper and discuss what the real estate market of India may look like in the upcoming year.
Housing properties may provide high returns
During the COVID-19 pandemic, the sale of housing properties in India took a hit. Rising inflation, an increase in mortgage rates, and a temporary decline in the economy were some of the factors that led to that dip. However, in the post-pandemic era, the real estate market witnessed a strong revival. The sale of residential properties has already increased by 51% after 2020.
These data indicate a strong momentum for the residential real estate market. Apart from the booming economy, government policies are also helping to create a favorable ecosystem for investing in the real estate sector.
Tier 2 and Tier 3 cities will emerge as booming real estate markets
Another trend that has become too prominent is the growth of the real estate market in Tier 2 and Tier 3 cities of India. As metropolitan cities are already overcrowded, several real estate investors have started moving toward developing cities. These towns have emerged as hot locations for real estate investors from all across India as well as foreign countries. So, as an investor, one can invest in residential or commercial properties lying in these belts. They have the potential to provide very good returns in the next one to two years. The real estate market in Tier 2 and Tier 3 cities is expected to outperform metro cities in 2023 by presenting a wide range of investment opportunities.
Luxury housing projects will remain in great demand
Luxury housing properties have been one of the drivers behind the real estate boom in India after 2020. And this trend is expected to continue in 2023. High-end flats and apartments that are priced at ₹2.5 crores or more will be in great demand in the upcoming year.
Several factors support this trend. The prevailing work-from-home culture among Indians even after the pandemic is over, hybrid working models being adopted by large corporates, and the increasing purchasing power among people are some of them.
NRI investments in Indian real estate can increase further
India’s real estate market has always been a preferred option among High Net Worth (HNI) investors from foreign countries. Non-Resident Indians (NRIs) have always taken a special interest in investing in properties in their motherland to earn returns on their investment. The favorable government policies have also supported them.
Now, in 2023, NRI investments in the Indian real estate market are expected to soar further. After the proposed changes in the Foreign Exchange Management Act (FEMA), NRIs will be allowed to own immovable properties in India with almost zero legal formalities. They will only need to complete the registration process, just like a domestic investor.
All projections and estimations indicate that 2023 could turn out to be a landmark year for India’s real estate sector. Both residential and commercial properties could witness huge demand, and investors can get a significant value for their money. With several top builders coming up with new projects, there are plenty of investment opportunities for investors of all types.
Having said that, it is crucial to remember that one must research, analyze, and carefully plan before going ahead with any kind of real estate investment in India. The type of property, location, price, and reputation of the builder are some of the factors that should play an important role in the decision-making process.
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